Abbott's nanny plan too costly, Government says

The Government has released an analysis showing the Coalition's nanny rebate plan will cost $2 billion over four years and lead to cuts in childcare benefits.

Opposition Leader Tony Abbott has promised a Coalition government would get the productivity commission to examine extending the childcare rebate to nannies.

But the Minister for Childhood, Kate Ellis, says the analysis by the departments of education and finance shows the Coalition would struggle to find the funding.

Ms Ellis says Mr Abbott should make it clear to the Australian public where the funding would come from.

"Tony Abbott said that this would come from within the existing funding envelop, trying to avoid adding to their budget black hole," she said.

"What that means is either the childcare benefit or the childcare rebate would need to be cut to fund it.

"That would require a 20 per cent cut in the childcare benefits which Australians are currently relying on.

"I'm calling on the Opposition Leader today to make incredibly clear to the Australian public, who would suffer these cuts, who would pay extra for their childcare to fund this undeveloped thought bubble."

And Ms Gillard brushed off Mr Abbott's nanny rebate proposal as nothing more than a "political game".

"Tony Abbott himself said that this would cost a lot of money... and he doesn't have it," she said during a media conference in Brisbane this morning.

"It equals cutbacks for some families in childcare."

But the Federal Opposition has dismissed criticism of its proposal.

Opposition childcare spokeswoman Sussan Ley says the rebate is just one option to be considered as part of a review of the whole system.

"Those in the Coalition that actually talk to parents, families and childcare centres are hearing that the needs of families are not being met," she said.

"The shift workers, the people in mining towns, remote and regional Australians, the children with special needs - we may well need to boost our in-home models of childcare. These are the things the productivity commission will investigate."

Meanwhile Greens Senator Sarah Hanson-Young says the Federal Government must consider new options to make childcare more affordable.

Senator Hanson-Young says families need more flexibility of childcare services and a complete overhaul of funding is needed.

"I don't believe that the rebate delivers the outcomes that it needs: quality care, accessibility and affordability," she said.

"We know that after the Government increased the rebate from 30 per cent to 50 per cent, centres around the country hiked up their prices. We know that simply giving rebates is not necessarily the answer."